Ethiopia Plans Export Hubs With $10 Billion Factory Parks

Ethiopia is targeting $1 billion of annual investment in industrial parks over the next decade to boost exports and make it Africa’s top manufacturer, a special adviser to Prime Minister Hailemariam Desalegn said.


“According to the vision, Ethiopia would be a leading manufacturing powerhouse in Africa,” Arkebe said. Photographer: William Davison/Bloomberg

The government may invest half of the $10 billion needed for zones across the country that will house textile, leather, agro-processing and other labor-intensive factories, Arkebe Oqubay said in an interview in the capital, Addis Ababa. The International Finance Corp., the World Bank’s private lending arm, along with Chinese and European lenders and private-equity funds are interested in projects, he said.

“In terms of industrial development and manufacturing development, we want to put Ethiopia number one in Africa,” Arkebe said.

Growth in Ethiopia has surpassed every other sub-Saharan country over the past decade and is forecast by the International Monetary Fund to exceed 8 percent over the next two years. The state-planned economy is opening up to foreign investors following its sale of $1 billion of Eurobonds last year and plans to start an equities and secondary debt market, London-based Exotix, which has a buy rating on the Eurobonds, said May 7.

Ethiopia’s manufacturing industry is valued at about $1.35 billion, compared with $48.1 billion in South Africa, according to World Bank data.

Calvin Klein

American clothing company Phillips-Van Heusen Corp., which owns the Tommy Hilfiger and Calvin Klein brands, is considering using suppliers at an industrial park in Hawassa, south of Addis Ababa, the government said last month. Hennes & Mauritz AB, Europe’s second-largest clothing retailer, already sources from three factories in Ethiopia, where wages can be as little as a tenth of China’s and access to the U.S. market is duty free under the African Growth and Opportunity Act.

Ethiopia had targeted a 15-fold increase in textile and leather exports to $1.5 billion in a five-year plan that finishes in July, the end of the country’s fiscal year. That surge failed to take place because of a lack of specialized parks with services including utilities, banks, customs and transport links, said Arkebe, who is chairman of the state-run Industrial Parks Development Corp.

Total manufacturing shipments earned $262 million in the first eight months of this fiscal year, up 10 percent from the previous year. Investing in industrial parks will be “a major solution to the problems,” Arkebe said.

200,000 Jobs

The government will use about half of the funds from the Eurobond to develop parks in the financial year that begins July 8, he said. The government’s so-called Vision 2025 sees manufacturing expanding 25 percent a year and creating employment for 200,000 Ethiopians annually, Arkebe said.

The World Bank is spending $250 million on a second industrial zone at Bole Lemi, on the edge of Addis Ababa. In October, Shin Textile Solutions Co. of South Korea moved into the existing factory park at Bole Lemi, employing 3,000 people, Arkebe said.

A textile park opened in Hawassa in April and construction begins this month on zones in Dire Dawa and Adama, which are both on Ethiopia’s main trade route to a port in neighboring Djibouti, according to Arkebe. Kombolcha and Mekele will also be manufacturing centers. The industrial park plans need to be endorsed by federal lawmakers who will be voted for in May 24 elections, he said.

Chinese Funding

Electric railways costing $4 million per kilometer will serve the environmentally friendly hubs that private companies can develop “almost” rent free from the parks company, which will have as much as 100,000 hectares of land, Arkebe said.

Developers will get a tax holiday of as long as 15 years and duty-free privileges, with incentives increasing for building done outside the capital, he said. Manufacturers can get tax exemptions of 10 years if they export all their products from a site not in Addis Ababa.

One rail project connecting Addis Ababa with the cities of Jimma, Bedele and Ambo began last week. Chinese banks will “mainly” finance the 491-kilometer (305-mile) rail link, he said. Another railway from a port in the Djiboutian town of Tadjourah port to Bahir Dar city and from the capital south to the cities of Hawassa and Arba Minch will be completed by July 2020, Arkebe said.


Separately, the government says a Chinese-funded track from Addis Ababa to Djibouti will be completed this year. Work is also continuing on a $1.7 billion line that goes through Kombolcha, funded by the Export Credit Bank of Turkey and Credit Suisse Group AG.


Egypt’s President Sisi Welcomes Freed Ethiopians Fleeing Libya in Cairo


Egypt’s President Abdel Fattah al-Sisi welcomed on Thursday a group of Ethiopian nationals who were abducted in neighbouring Libya and flown back on an Egyptian plane, reported state television.

Twenty-seven Ethiopians received Sisi’s welcome, in the presence of the Ethiopian ambassador to Cairo, at the Cairo International Airport, after the success of Egyptian authorities in setting them free.

“What happens in Libya is a concern for all of us, and we are saying to the world that Libya should return a safe and stable country for its people and even to its visitors,” Sisi said during a press conference at the airport.

“We were very concerned about our Ethiopian brothers after the criminal beheading during the previous days.”

Sisi stressed in a short address aired on state television that there is no separation between Egyptians, Ethiopians and Sundanese. “We all drink the same water,” Sisi said, in reference to the Nile River which the three countries share.

Egypt uses its force to defend rights and protect sovereignty, Sisi said, and not to commit violence or abduction.

The president condemned the incident of shooting and beheading over two dozen Christian Ethiopians in Libya, at the hands of militants who identified themselves as the Libyan division of the Islamic State fighters in Iraq and Syria last month.

The same group of militants released a video in February showing the beheading of 21 Christians, including 20 Coptic Egyptians, in Libya.

Egypt’s air force conducted in February air strikes which it says hit militant targets a day afterwards, in response to the attack.


Ethiopian Airlines to fly from L.A. to Dublin, Addis Ababa


Ethiopian Airlines plans to add Boeing 787 Dreamliner service to Los Angeles, opening a route to the Ethiopian capital of Addis Ababa that would have a two-hour stopover in Dublin.

The carrier would sell tickets not only on its one-stop route from L.A. to Addis Ababa, but also separately on each of the L.A.-Dublin and Dublin-Addis Ababa legs. Ethiopian Airlines says the flights will be the only direct service connecting Africa with Ireland and the West Coast of the United States.

Ethiopian Airlines plans to fly the Addis Ababa-Dublin-Los Angeles route three times a week using its Boeing 787 aircraft.
PHOTOS: See what it was like to be on Ethiopian Airlines’ Dreamliner delivery flight (August 2012)
TODAY IN THE SKY: Ethiopian Air becomes 1st in world outside Japan to fly Dreamliner (August 2012)

“Our new flights connecting Addis Ababa, Dublin and Los Angeles will play a critical role in the expansion of trade and tourism investment between the fast-growing continent of Africa, the United States and Ireland,” Ethiopian Airlines CEO Tewolde Gebremariam says in a statement.

“Our flights to Dublin and Los Angeles will be operated with the B787 Dreamliner, which offers unmatched on-board comfort through unique features such as greatly reduced noise, higher cabin air humidity, the biggest windows in the sky and spacious cabin interior, making this long-haul route more comfortable for our passengers,” Gebremariam added.

TODAY IN THE SKY: Ethiopian Airlines plans to expand flights to U.S. (August 2014)

The route is not a surprise; Gebremariam told Today in the Sky in August that the carrier hoped to begin flying between Los Angeles and Addis Ababa via Dublin.

The Irish Times suggests the route was officially announced after Ethiopia negotiated with Ireland for so-called “fifth freedom” rights in the nations’ bilateral aviation agreement. In layman’s terms, such rights allow an airline to sell tickets for the portion of the flight between the stopover city and final destination of a one-stop route. At least one leg of the journey must begin or end in the carrier’s home country.

MORE: Dreamliner lauded as Ethiopian Air reports record profit (September 2013)

As for Ethiopian, Los Angeles will become its second U.S. destination, joining Washington Dulles. The carrier also flies to Toronto in Canada.

As one would expect, the new route was lauded by Dublin airport officials.

“We are delighted to welcome Ethiopian Airlines to Ireland,” Dublin Airport Authority CEO Kevin Toland says to The Irish Times. “This new service will reconnect Dublin with Los Angeles and also brings unrivaled connectivity into Africa, as Ethiopian has the largest number of African destinations of any airline.”


Awash Woldia / Hara Gebeya Railway Line Project, Ethiopia


Awash Woldia/Hara Gebeya Railway Project is a new railway line being constructed between the Ethiopian towns Awash and Woldia.

Ethiopian Railway Corporation (ERC), the owner of the project, is investing $1.7bn in the project. The new line will be completed by December 2015.

The new railway line will connect northern Ethiopia with central region. It will also link the northern and eastern transportation network of Ethiopia.

Background, purpose and benefits of the Awash Woldia/Hara Gebeya railway project

“The new railway line will connect northern Ethiopia with central region.”

The Ethiopian Government has been undertaking several transportation projects as part of a five-year growth and transformation plan (GTP), which aims to enhance the transportation network within the country by connecting to adjacent countries and ports. It will provide efficient mobility and improve the export and import activities, boosting the economic development. National Railway Network of Ethiopia (NRNE) is one of the several projects constituted in the plan.

ERC has recognized eight railway routes as significant for development. These routes will have a total length of approximately 5,060km including buffer.

NRNE projects will be implemented in two phases. Phase I is composed of five railway projects which include Addis Ababa – Djibouti Railway Project, Mekele – Woldia/Hara Gebeya – Semera-Tadjourah Port Railway Project, Addis Ababa – Ijaji-Jimma-Dima including Jimma – Bedele Railway Project, Awash-Kombolcha-Hara Gebeya Railway Project and Mojo-Shashemene-Arbaminich-Weyto Railway Project.

Phase II includes six projects, Jimma-Guraferda-Dima diorected to Boma , Ijaji-Nekemet-Assosa-Kumuruk, Mekele-Shire, Fenoteselam-Bahirdar-Wereta-Woldia, Wereta Azazo-Metema and Adama-Indeto-Gassera-Ginir.

Line routes and benefits of the Awash Woldia/Hara Gebeya railway project

The new Awash Woldia/Hara Gebeya Railway Project is an extension project that will connect to Addis Adaba – Djibouti railway line. Awash railway station lies along the railway line from Addis Adaba to Djibouti.

Addis Adaba – Dijbouti is the primary transportation link for mobility of goods and people. The route is also used for import and export purposes through Djibourti port. The 389km-long single railway line will start from the north east of Awash and progress northwards through Kombolcha to reach Woldia.

The line will also link with Woldia/Hara Gebeya- Semera-Dicheto-Elidar project which will connect northern Ethiopia with Tadjurah port in Djibouti. The Woldia/Hara Gebeya- Semera-Dicheto-Elidar project will provide second transport link to the port and enhance the country’s development. All the current design works are subject to changes according to the final design, however.

Infrastructure of ERC’s new railway line

The Awash Woldia / Hara Gebeya railway line will involve the construction of 389km of new rail line, 40km maintenance lines and 18km station lines. It also includes construction of new tunnels, three terminal stations with two platforms, and six intermediate stations with a single platform. The total length of the railway line will thus be 447km.

“The new line will be completed by December 2015.”

An operation control tower will also be built exclusively for the line. The overhead centenary will provide electricity for the main railway line, depot and stabling lines. Two maintenance facilities, warehouse, generator rooms, maintenance and painting workshop, mechanical service building, wash services, service and commercial buildings will be constructed adjacent to the railway stations.

Contractors involved with ERC’s new $1.7bn railway line

In June 2012, ERC signed an engineering, procurement and construction contract worth $1.7bn for the Awash Woldia/Hara Gebeya railway project with Yapi Merkezi, a company based in Turkey. The contractual terms mandate to complete the construction of the new line within 42 months.

Yapi Merkezi is one of the world’s leading transportation infrastructure companies with a vast experience in rail systems. In addition to the $1.7bn contract signed in Ethiopia, Yapi Merkezi has also successfully completed the Dubai Metro Project, Casablanca tramline and Ankara – Konya high speed rail line, which make Yapi Merkezi a world brand in rail systems.